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Pre-Year End Check List For Real Estate Investors




What Should Real Estate Investors Do Before The End Of The Year?

The hustle and bustle of year end is upon us. You can’t believe it; the year has flown by so fast. It seems like it was just yesterday you were wishing friends and family happy new year. The reality is no matter how good or bad it was, the current year is about to end, and you will be on the threshold of a new year soon. What happens next year depends on actions that are taken this year.


How do you, as a real estate investor, not only ensure that you finish the current year strong but also set yourself up for success in the coming year? You make some mart year end moves.


What are those smart year end moves you ask?


That is exactly what we will dive into today.



What Are Smart Year End Moves For Real Estate Investors?

There are many things real estate investors should do to prepare for year end. We boiled that down to a few simple ideas. If you get these key things done during each year end you should see snowball growth in your real estate investing career each subsequent year.


So, what are smart year end moves for real estate investors? See below:

  • Review Your Achievements and Failures From The Current Year

  • Set Intentions And Goals For The Coming Year

  • Consider Tax Planning For The Current Year And Next Year

  • Get Your Tax Documents Ready

  • Invest In And Buy More Property

  • Check In With Your Network

We will explore each of these smart year end moves in this article.



Review Your Achievements and Failures From The Current Year

One thing many people fail to do is review their progress. Goal setting is very exciting and is usually done during a time of high emotion, motivation, and passion. That passion and motivation may die down during the year, whether due to perceived ongoing failure, difficulty, or distractions. On the other end of the spectrum, maybe because of continued perceived success you may be going full steam ahead never actually checking in if things are going in the right direction.


It is important to take periodic moments during the year, and your overall investing journey, to pause, reflect and see how you and your investments are performing. This timely review and reflection may reveal insights which can be groundbreaking in changing the trajectory of your investing future. Results of checking in on your goals may show that you are not performing as well as you thought, or that you are doing better than expected.


You review of your achievements and failures during the current year will prepare you for goal setting for next year.



Set Intentions And Goals For The Coming Year

Goal setting lays the groundwork for a successful year of real estate investing. Wealth is not built by accident or coincidence but rather through intentional actions and discipline in execution over time.


Consider what may happen to the economy on a macroeconomic and microeconomic level. How do these things impact your investments and investment strategy?


What personal goals, events, milestones may be coming up in the next year? How can your real estate investing align with that?


How did your investments perform in the past year? What does this inform you about how you should navigate investing in the coming months?


Maybe you have never invested in real estate before and would like to start in the coming year. This process of goal setting is even more important to help set you on the right direction. Consider, what do you need to learn, what do you need to do, who do you need to meet, where do you need to go and how do you need to act to be successful in real estate investing next year?



Consider Tax Planning For The Current Year And Next Year

Real estate investing has long been known as one of the most tax advantaged investing vehicles. The vehicle however is only as good as how you use it. There is no use in buying a race car if all you plan to do is run errands locally in your neighborhood. In the same way if you have invested in real estate, you should ensure that you are getting the most benefit you can from that investment.


You can complete a formal tax planning session with a tax professional for the greatest results. It would be best to complete your tax planning session at the end of Q3. This would allow you to estimate where you will end up tax wise at the end of the year and what proactive steps you can take to save more on your tax bill or completely eliminate it come year end. Further you will have an entire quarter to take the actions that are suggested by the tax professional during your tax planning session for real estate investing.


Perhaps you are more the turbo tax type of individual and currently do not choose to use a tax professional. It is still advisable that you take into consideration where you will end up tax wise at year end and what things you could potentially do to help with your tax bill. Some potential actions you could take to reduce your tax liability are accelerating some expenses and funding retirement accounts.



Get Your Tax Documents Ready

Some people are more organized than others. This may be an easy task for those that use automated systems and track their investing on a regular basis. If this is not you, then it would be advisable that you start early to get your documents together to prepare for filing your taxes come year end. If you completed a tax planning session, then chances are you already will have a head start on this.



Invest In And Buy More Property

Aside from acting on guidance from your tax planning sessions buying property right before year end (or shortly after year end) is one of the smartest things real estate investors can do.


During the end of the year there are usually less sellers and less buyers with the market typically skewed in favor of the buyers. Prices tend to be lower during year end and transactions tend to be less frequent; transaction activity is especially impacted by all the holidays that occur in the last quarter of the year.


Perhaps your tax planning session resulted in the outcome that you need to buy more property, there is probably someone who had the opposite result – they need to sell a property before year end for tax purposes. Individuals who are selling during winter months, traditionally the slowest months for real estate, are likely to be more motivated than those who are able to hold on and wait for the spring/summer selling season to put their properties on the market.


Even better you may be able to find an owner who has not been able to sell their property for a long time. He or she may have not been motivated when they first listed the property, but after several months unable to sell they may be more willing to negotiate at year end.



Check In With Your Network

During the holidays it is natural for people to get together and celebrate. Whether it is during Thanksgiving, Diwali, Hanukkah, Christmas or another festive occasion, the last few months of the year are usually filled with celebrations. Someone in your network is probably celebrating something. Even if they aren’t celebrating a specific festive event, the holidays provide a good excuse to check in and reconnect if you haven’t been in touch all year.


The individuals in your network are key to being able to be successful in real estate. They may know of a new deal to invest in, the latest developments in real estate markets and much more. If they are not currently investing in real estate they may be interested in what you are currently doing and you could be a source of knowledge and opportunity for them.


Interested in learning more about investing in multifamily apartments? Give us a call or check out some of the other free resources we have available at Investupmultifamily.com.